Nifty 50 January Futures (7,270)
Following a gap-up open at 7,364, the Nifty futures contract extended its bullish momentum. However, the contract encountered a key resistance at 7,400 and started to decline.
The contract has plunged more than 120 points from its intra-day high of 7,401 and is currently hovering below the key support level of 7,300. The near-term trend is down. Indicators in the daily chart continue to feature in the bearish zone.
Traders with a short-term horizon can make use of rallies to sell the contract while maintaining a stop-loss at 7,310 levels.
The contract can decline to 7,260 and then to 7,233 levels. Next key support is at 7,200.
Key resistances are placed at 7,330 and 7,350 levels. Subsequent resistances are at 7,375 and 7,400.
Only a strong rally above 7,350 can bring back positive sentiment and take the contract higher to 7,400 levels.
Strategy: Make use of rallies to initiate short position with a stop-loss at 7,310 levels.
Supports: 7,260 and 7,233
Resistances: 7,330 and 7,350